NTT DoCoMo revenues up on data growth, but profits fall

NTT DoCoMo has reported a 6.1% year-on-year increase in revenues for the last nine months of 2012, to ¥3,370.8 billion ($37 billion), thanks to the growing take-up of LTE-based smartphones and data services in the final part of the year.

Nevertheless, net income for the same period fell by 5.6%, to ¥702.2 billion, due to an increase in operating expenses aimed at strengthening the Japanese operator’s cloud business and higher handset costs.

NTT DoCoMo has reported a 6.1% year-on-year increase in revenues for the last nine months of 2012, to ¥3,370.8 billion ($37 billion), thanks to the growing take-up of LTE-based smartphones and data services in the final part of the year.

Nevertheless, net income for the same period fell by 5.6%, to ¥702.2 billion, due to an increase in operating expenses aimed at strengthening the Japanese operator’s cloud business and higher handset costs.

Although overall sales increased, revenues from the operator’s main cellular business fell 1.1%, to ¥2,787.1 billion, with growth in data services unable to offset a decline in voice.

NTT DoCoMo (Tokyo, Japan) has been fighting to limit customer losses as Japanese consumers take advantage of mobile number portability, but claims the launch of new handsets in recent months has helped to mitigate churn, which rose by 0.27 points to 0.8% in the nine-month period.

Besides introducing 40 new models, NTT DoCoMo has also launched new tariffs for its Xi-branded LTE service and worked to expand the coverage and capability of its network.

NTT DoCoMo claimed to have 9 million Xi subscribers on 9 January 2013, compared with just 3.32 million on 30 June 2012, and expects to have signed up a total of 11 million customers by the end of the financial year.

The operator began offering 100Mbps LTE services in some areas of Japan in November 2012, and from December 2012 has also been installing Xi femtocells compatible with LTE and 3G systems.

Capital expenditure rose to ¥438.6 billion, compared with ¥399.6 billion for the corresponding nine-month period in 2012.

Like other operators in saturated markets, NTT DoCoMo is hoping a move into new business areas, such as banking, content and mobile payments, will drive revenue growth in future.

It claims to have generated Y370 billion in revenues from new business areas in the recent nine-month period and is aiming to make Y1,000 billion in the 2015 financial year.

The operator’s focus on cloud services forms part of this initiative; in the past three months, it has launched cloud-based data-storage, gaming and translation services under its ‘docomo cloud’ brand.